The European Commission said Monday it has opened a formal investigation into concerns that Aspen Pharma has engaged in excessive pricing concerning five life-saving cancer medicines. The Commission said it will investigate whether Aspen has abused a dominant market position in breach of EU antitrust rules.

Aspen is a global pharmaceutical company headquartered in South Africa.

According to Commissioner Margrethe Vestager, in charge of competition policy, “When we get sick, we may depend on specific drugs to save or prolong our lives. Companies should be rewarded for producing these pharmaceuticals to ensure that they keep making them into the future. But when the price of a drug suddenly goes up by several hundred percent, this is something the Commission may look at. More specifically, in this case we will be assessing whether Aspen is breaking EU competition rules by charging excessive prices for a number of medicines.”

The investigation concerns Aspen’s pricing practices for niche medicines containing the active pharmaceutical ingredients chlorambucil, melphalan, mercaptopurine, tioguanine and busulfan. The medicines in question are used for treating cancer, such as hematologic tumours. They are sold with different formulations and under multiple brand names. Aspen acquired these medicines after their patent protection had expired.

The Commission will investigate information indicating that Aspen has imposed very significant and unjustified price increases of up to several hundred percent, so-called ‘price gouging’. The Commission has information that, for example, to impose such price increases, Aspen has threatened to withdraw the medicines in question in some Member States and has actually done so in certain cases.

According to the Commission, Aspen’s behavior may be in breach of the EU’s antitrust rules (Article 102 of the Treaty on the Functioning of the European Union (TFEU) and Article 54 of the European Economic Area (EEA) Agreement, which forbid the imposition of unfair prices or unfair trading conditions on customers.

The investigation covers all of the EEA except Italy, where the Italian competition authority already adopted an infringement decision against Aspen on 29 September 2016.

This is the Commission’s first investigation into concerns about excessive pricing practices in the pharmaceutical industry.

The Commission said it will now carry out its in-depth investigation as a matter of priority. The opening of formal proceedings does not prejudge the outcome of the investigation.